Legal Review and Analysis of Rajeswari & Ors vs Shanmugam & Anr 2025 INSC 1329
In-Short
Case: Rajeswari vs. Shanmugam (2025 INSC 1329): The Supreme Court ruled that a deed assigning a decree for specific performance of a sale agreement does not require compulsory registration, as such a decree does not itself create any right, title, or interest in the immovable property.
1. Heading of the Judgment
Rajeswari & Ors. vs. Shanmugam & Anr
Citation: 2025 INSC 1329
Court: Supreme Court of India
Bench: Justice J.B. Pardiwala and Justice K.V. Viswanathan
Original Case: Special Leave Petition (Civil) No. 3532 of 2018
Decided On: November 19, 2025
2. Related Laws and Legal Provisions
The judgment primarily interprets and applies the following statutes and legal principles:
Section 17(1)(e) of the Registration Act, 1908: This is the central provision under scrutiny. It mandates the compulsory registration of non-testamentary instruments that transfer or assign a decree or award which itself "purports or operates to create, declare, assign, limit or extinguish... any right, title or interest... in immovable property."
Section 54 of the Transfer of Property Act, 1882: Defines "sale" as a "transfer of ownership" and explicitly states that a "contract for sale... does not, of itself, create any interest in or charge on such property."
Specific Relief Act, 1963:
Section 28: Establishes that a contract is not extinguished by a decree for specific performance and provides for rescission in certain circumstances.
Section 15: Recognizes that a "representative-in-interest" or assignee of a party can obtain specific performance.Code of Civil Procedure, 1908:
Order XXI, Rule 16: Provides the procedure for an assignee of a decree to apply for its execution.Service Jurisprudence Principles: The judgment relies on established principles of contract law regarding the assignability of contractual rights.
3. Basic Judgment Details
This civil appeal arose from a Special Leave Petition against an order of the High Court. The core dispute involved the execution of a decree for specific performance of a sale agreement concerning immovable property. The legal heirs of the original judgment-debtor (the appellants) challenged the execution of the sale deed in favor of the first respondent, who claimed to be the assignee of the original decree. The appellants' primary contention was that the deed assigning the decree was invalid and unenforceable as it was not registered under the Registration Act, 1908.
4. Core Principles and Analysis of the Judgment
The Central Issue: The Mandate of Registration for Assigning a Decree
The singular legal question before the Supreme Court was whether a deed assigning a decree for specific performance of an agreement to sell immovable property is compulsorily registrable under Section 17(1)(e) of the Registration Act, 1908.
The Supreme Court's In-Depth Analysis and Reasoning
A. The Legal Character of a Specific Performance Decree
The Court began its analysis by clarifying the fundamental nature of a decree for specific performance. It drew a crucial distinction between a "contract for sale" and a completed "sale." Relying on its landmark judgment in Babu Lal vs. Hazari Lal Kishori Lal (1982), the Court reiterated that "neither a contract for sale nor a decree passed on that basis for specific performance of the contract gives any right or title to the decree-holder." The right and title to the immovable property pass only upon the execution and registration of the sale deed, either voluntarily by the judgment-debtor or through the court's coercive process. A decree for specific performance is, therefore, a right to compel the performance of a contract, not a right in the property itself.
B. The Contract Subsists Despite the Decree
The Court emphasized that passing a decree does not extinguish the original contract between the parties. It cited Hungerford Investment Trust vs. Haridas Mundhra (1972) to hold that the contract subsists despite the decree, and the parties continue to have obligations to perform it. The decree is often considered a preliminary decree, and the suit is deemed to be pending until the contract is fully performed through the execution of a sale deed. This reinforces the idea that the decree itself is an instrument to enforce a personal right, not a conveyance of property.
C. Scrutinizing Section 17(1)(e) of the Registration Act
The Court performed a precise textual analysis of Section 17(1)(e). The provision mandates registration only if the decree being assigned "purports or operates to create, declare, assign, limit or extinguish... any right, title or interest... in immovable property." The Court held that since a decree for specific performance, as established in the previous sections of its analysis, does not itself create, declare, or assign any right, title, or interest in the immovable property, an instrument that merely assigns such a decree falls outside the ambit of Section 17(1)(e). The Court expressly approved and concurred with the reasoning of the Bombay High Court in Amol vs. Deorao (2011), which had arrived at the same conclusion.
D. Rejection of Counter-Arguments
The Court dismissed the appellants' arguments:
No Creation of Interest: It rejected the contention that a specific performance decree creates an "interest" in the property, clarifying that it only creates a right to seek enforcement of a contract.
No Loss of Revenue: The Court also found no merit in the argument that not requiring registration would allow parties to avoid stamp duty and registration charges. It reasoned that until a sale deed is executed and registered, no transfer of property occurs, and the state does not lose its revenue, which is collected at the stage of the final conveyance.
E. Overruling Contrary Precedent
The Supreme Court explicitly overruled the judgment of the Andhra Pradesh High Court in K. Bhaskaram vs. Mohammad Moulana (2005), which had held that such assignment deeds require registration. The Court stated that this ruling "does not lay down the correct law," thereby settling the judicial divergence on this point.
5. Final Outcome and Supreme Court's Directions
The Supreme Court dismissed the appeal filed by the legal heirs of the judgment-debtor. It upheld the judgment of the High Court, which had set aside the Executing Court's order. The Court conclusively held that:
A decree for specific performance of a contract for the sale of immovable property does not, by itself, create any right, title, or interest in the immovable property.
Consequently, a deed assigning such a decree does not purport or operate to assign any right, title, or interest in immovable property.
Therefore, an assignment deed of a specific performance decree does not require compulsory registration under Section 17(1)(e) of the Registration Act, 1908.
The assignment deed (Exhibit B1) in the present case was valid and enforceable, and the assignee was entitled to execute the decree.
6. (MCQs) Based on the Judgment
MCQ 1: According to the Supreme Court's judgment in Rajeswari & Ors. vs. Shanmugam & Anr. (2025 INSC 1329), what is the legal status of a decree for specific performance of a sale agreement concerning immovable property?
A) It immediately transfers the title of the property to the decree-holder.
B) It creates a contingent interest in the immovable property in favor of the decree-holder.
C) It gives the decree-holder a right to compel the performance of the contract but does not create any title or interest in the property.
D) It operates as a final conveyance and extinguishes the original contract.
MCQ 2: The Supreme Court held that a deed assigning a decree for specific performance does not require compulsory registration. This conclusion was primarily based on the interpretation of which legal provision?
A) Section 54 of the Transfer of Property Act, 1882.
B) Order XXI, Rule 16 of the Code of Civil Procedure, 1908.
C) Section 17(1)(e) of the Registration Act, 1908.
D) Section 28 of the Specific Relief Act, 1963.
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